LLP: Understanding the Role and Responsibilities of a Designated Partner

Introduction

An LLP designated partner manages the company’s operations and administrative matters. An LLP is a unique way to conduct business because it combines a partnership’s flexibility, the company’s limited liability benefit, and advantageous taxation laws. 

Who is ineligible to be nominated as a designated partner in partnership firms, other limited liability partnerships, and LLPs?

The eligibility criteria is as follows:

1. Fewer than eighteen years of age
2. An insane or careless individual
3. An individual declared bankrupt.
4. Someone who has neglected to make payments to their creditors
5. Any individual who has served a sentence of at least six months in prison

What distinguishes an LLP partner from a designated partner?

A designated partner identification number (DPIN) is unnecessary and optional for general partners, who might be anyone. Within the company, he serves as both an agent and a director.

The partner designated by the Limited Liability Partnership’s shareholders is a selected partner. A Designated Partnership Identification Number (DPIN) is assigned to him. He represents the organization as its agent.

Who can hold the position of designated partner?

1. An individual should be a designated partner.
2. They need to be a major, meaning they must be at least 18.
3. Their DPIN, or designated partner identification number, should be present.

Partner’s Roles, Responsiblities, and Benefits in LLP

1. The designated partner is in charge of handling all of the firm’s administrative duties.
2. To inform the company’s registrar of changes to the partner’s name or address.
3. Should inform the Registrar of Companies of any changes to the LLP’s name, address, or operations.
4. To draft the LLP’s statement of accounts.
5. To submit an annual return to the Registrar of Companies each year by sixty days following the end of the fiscal year.
6. They are required to sign the prepared accounts.
7. They are responsible for monitoring the documents and accounting books.
8. The designated partner must sign an LLP agreement with explicit language regarding the responsibilities, compensation, benefits, and liabilities.
9. The designated partner is legally required to have a shared right and make decisions together regarding issues about the organization.
10. The chosen partner must carry out legal business.
11. Maintaining appropriate coordination and communication between employers and employees is one of their tasks.
12. They must sign all e-forms submitted to the Registrar of Companies.

Procedure for including a Nominated Partner

Step 1: Get that partner’s approval

Step 2: File a DSC application

Step 3: Request a DPIN

Step 4: Create a supplemental deed with the new partner’s name.

Step 5: Within 30 days of the appointment, file Form 4 (Notice) as an attachment with the consent letter.

Step 6: Within 30 days of the appointment, file Form 3 (Information regarding Limited Liability Partnership Agreement and for the amendments, if any) as an attachment with a supplemental and original deed.

Documents Needed for the appointment of a Designated Partner

1. Affirmed copies of the identification, residential proof, and Pan Card
2. The applicant’s phone number, email address, and digital signature, if available
3. A passport-sized photo of the candidate
4. LLP Contract
5. Qualifications for schooling and information regarding the capital commitment to LLP

If no appointed designated partner is found

If the designated partner is not appointed, the limited liability partnership (LLP) will be penalized, with the penalty sum potentially reaching up to Rs. 10,000.

After the designated partner position becomes vacant, it must be filled within thirty days. The chosen partner position should be filled within 60 days of the LLP’s formation.

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